093_HB2774ham001
LRB093 07794 JLS 12980 a
1 AMENDMENT TO HOUSE BILL 2774
2 AMENDMENT NO. . Amend House Bill 2774 by replacing
3 the title with the following:
4 "AN ACT concerning insurance."; and
5 by replacing everything after the enacting clause with the
6 following:
7 "Section 5. The Illinois Insurance Code is amended by
8 adding Section 368b as follows:
9 (215 ILCS 5/368b new)
10 Sec. 368b. Prohibition of waiver of requirements and
11 prohibitions. No contract between an insurer, health
12 maintenance organization, independent practice association,
13 or physician hospital organization and a health care
14 professional or health care provider shall contain any
15 provision, term, or condition that limits, restricts, or
16 otherwise waives any of the requirements and prohibitions set
17 forth in this Article. Any provision purporting to make such
18 a waiver is void and unenforceable.
19 Section 10. The Health Maintenance Organization Act is
20 amended by changing Section 5-3 as follows:
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1 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
2 Sec. 5-3. Insurance Code provisions.
3 (a) Health Maintenance Organizations shall be subject to
4 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
5 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
6 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
7 356y, 356z.2, 367i, 368a, 368b, 401, 401.1, 402, 403, 403A,
8 408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of
9 subsection (2) of Section 367, and Articles IIA, VIII 1/2,
10 XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois
11 Insurance Code.
12 (b) For purposes of the Illinois Insurance Code, except
13 for Sections 444 and 444.1 and Articles XIII and XIII 1/2,
14 Health Maintenance Organizations in the following categories
15 are deemed to be "domestic companies":
16 (1) a corporation authorized under the Dental
17 Service Plan Act or the Voluntary Health Services Plans
18 Act;
19 (2) a corporation organized under the laws of this
20 State; or
21 (3) a corporation organized under the laws of
22 another state, 30% or more of the enrollees of which are
23 residents of this State, except a corporation subject to
24 substantially the same requirements in its state of
25 organization as is a "domestic company" under Article
26 VIII 1/2 of the Illinois Insurance Code.
27 (c) In considering the merger, consolidation, or other
28 acquisition of control of a Health Maintenance Organization
29 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
30 (1) the Director shall give primary consideration
31 to the continuation of benefits to enrollees and the
32 financial conditions of the acquired Health Maintenance
33 Organization after the merger, consolidation, or other
34 acquisition of control takes effect;
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1 (2)(i) the criteria specified in subsection (1)(b)
2 of Section 131.8 of the Illinois Insurance Code shall not
3 apply and (ii) the Director, in making his determination
4 with respect to the merger, consolidation, or other
5 acquisition of control, need not take into account the
6 effect on competition of the merger, consolidation, or
7 other acquisition of control;
8 (3) the Director shall have the power to require
9 the following information:
10 (A) certification by an independent actuary of
11 the adequacy of the reserves of the Health
12 Maintenance Organization sought to be acquired;
13 (B) pro forma financial statements reflecting
14 the combined balance sheets of the acquiring company
15 and the Health Maintenance Organization sought to be
16 acquired as of the end of the preceding year and as
17 of a date 90 days prior to the acquisition, as well
18 as pro forma financial statements reflecting
19 projected combined operation for a period of 2
20 years;
21 (C) a pro forma business plan detailing an
22 acquiring party's plans with respect to the
23 operation of the Health Maintenance Organization
24 sought to be acquired for a period of not less than
25 3 years; and
26 (D) such other information as the Director
27 shall require.
28 (d) The provisions of Article VIII 1/2 of the Illinois
29 Insurance Code and this Section 5-3 shall apply to the sale
30 by any health maintenance organization of greater than 10% of
31 its enrollee population (including without limitation the
32 health maintenance organization's right, title, and interest
33 in and to its health care certificates).
34 (e) In considering any management contract or service
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1 agreement subject to Section 141.1 of the Illinois Insurance
2 Code, the Director (i) shall, in addition to the criteria
3 specified in Section 141.2 of the Illinois Insurance Code,
4 take into account the effect of the management contract or
5 service agreement on the continuation of benefits to
6 enrollees and the financial condition of the health
7 maintenance organization to be managed or serviced, and (ii)
8 need not take into account the effect of the management
9 contract or service agreement on competition.
10 (f) Except for small employer groups as defined in the
11 Small Employer Rating, Renewability and Portability Health
12 Insurance Act and except for medicare supplement policies as
13 defined in Section 363 of the Illinois Insurance Code, a
14 Health Maintenance Organization may by contract agree with a
15 group or other enrollment unit to effect refunds or charge
16 additional premiums under the following terms and conditions:
17 (i) the amount of, and other terms and conditions
18 with respect to, the refund or additional premium are set
19 forth in the group or enrollment unit contract agreed in
20 advance of the period for which a refund is to be paid or
21 additional premium is to be charged (which period shall
22 not be less than one year); and
23 (ii) the amount of the refund or additional premium
24 shall not exceed 20% of the Health Maintenance
25 Organization's profitable or unprofitable experience with
26 respect to the group or other enrollment unit for the
27 period (and, for purposes of a refund or additional
28 premium, the profitable or unprofitable experience shall
29 be calculated taking into account a pro rata share of the
30 Health Maintenance Organization's administrative and
31 marketing expenses, but shall not include any refund to
32 be made or additional premium to be paid pursuant to this
33 subsection (f)). The Health Maintenance Organization and
34 the group or enrollment unit may agree that the
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1 profitable or unprofitable experience may be calculated
2 taking into account the refund period and the immediately
3 preceding 2 plan years.
4 The Health Maintenance Organization shall include a
5 statement in the evidence of coverage issued to each enrollee
6 describing the possibility of a refund or additional premium,
7 and upon request of any group or enrollment unit, provide to
8 the group or enrollment unit a description of the method used
9 to calculate (1) the Health Maintenance Organization's
10 profitable experience with respect to the group or enrollment
11 unit and the resulting refund to the group or enrollment unit
12 or (2) the Health Maintenance Organization's unprofitable
13 experience with respect to the group or enrollment unit and
14 the resulting additional premium to be paid by the group or
15 enrollment unit.
16 In no event shall the Illinois Health Maintenance
17 Organization Guaranty Association be liable to pay any
18 contractual obligation of an insolvent organization to pay
19 any refund authorized under this Section.
20 (Source: P.A. 91-357, eff. 7-29-99; 91-406, eff. 1-1-00;
21 91-549, eff. 8-14-99; 91-605, eff. 12-14-99; 91-788, eff.
22 6-9-00; 92-764, eff. 1-1-03.)
23 Section 15. The Voluntary Health Services Plans Act is
24 amended by changing Section 10 as follows:
25 (215 ILCS 165/10) (from Ch. 32, par. 604)
26 Sec. 10. Application of Insurance Code provisions.
27 Health services plan corporations and all persons interested
28 therein or dealing therewith shall be subject to the
29 provisions of Articles IIA and XII 1/2 and Sections 3.1, 133,
30 140, 143, 143c, 149, 155.37, 354, 355.2, 356r, 356t, 356u,
31 356v, 356w, 356x, 356y, 356z.1, 356z.2, 367.2, 368a, 368b,
32 401, 401.1, 402, 403, 403A, 408, 408.2, and 412, and
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1 paragraphs (7) and (15) of Section 367 of the Illinois
2 Insurance Code.
3 (Source: P.A. 91-406, eff. 1-1-00; 91-549, eff. 8-14-99;
4 91-605, eff. 12-14-99; 91-788, eff. 6-9-00; 92-130, eff.
5 7-20-01; 92-440, eff. 8-17-01; 92-651, eff. 7-11-02; 92-764,
6 eff. 1-1-03.)
7 Section 99. Effective date. This Act takes effect
8 December 1, 2003.".